In a strategic move to diversify beyond its domestic market, Chinese delivery giant Meituan is reportedly exploring the acquisition of Delivery Hero’s South-east Asian operations, specifically those under the Foodpanda brand. Sources familiar with the matter reveal ongoing talks between the two companies, though no certainty exists that the discussions will result in a transaction. Other potential bidders may emerge.
Meituan, established in 2010, has solidified its position as the largest food delivery platform in China, operating in over 2,800 cities and counties. This potential expansion into South-east Asia presents an intriguing development for the tech giant, challenging regional leaders like Grab Holdings, known for its dominance in ride-sharing, food delivery, and fintech.
Chris Lee, a tech industry analyst, comments, “Meituan’s move into South-east Asia signals a significant shift in the competitive landscape, posing a formidable challenge for Grab. This could potentially reshape the dynamics of the region’s food delivery and tech market.”
Meituan’s recent financial performance showcases resilience and adaptability. In the quarter ending June, the company experienced its fastest revenue growth since 2021, rebounding from the depths of the pandemic. Despite a challenging consumer spending environment, Meituan expanded its services from grocery retailing to group buying, launching KeeTa, a new food delivery brand in Hong Kong in May.
Amid its diverse ventures, Meituan abandoned its ride-hailing service in March, focusing on cost efficiency, and invested significantly in live-streaming services to compete with rivals like ByteDance’s Douyin. Shares of Meituan have seen a 36% decline this year in Hong Kong, reflecting challenges and uncertainties.
Meanwhile, Delivery Hero announced in September its intention to sell part of its South-east Asian operations, particularly the Foodpanda brand in several countries, where growth has stagnated post-Covid-19 lockdowns. CEO Niklas Oestberg acknowledged that the Asian market is the company’s largest and most profitable segment but cited a 6.2% decline in gross merchandise value in the third quarter compared to the previous year.
As these developments unfold, the dynamics of the food technology sector in South-east Asia are poised for potential transformation. The competition intensifies, and stakeholders eagerly await the outcome of Meituan’s exploration into new territories.